SOSC 4043 Chapter Notes -Stakeholder Theory, Agency Cost, Bounded Rationality

• School: York University
• Department: Social Science
• Course: SOSC 4043
• Professor: Sonya Scott

Document Summary

Theoretical aspects of corporate governance (by: christine mallin) The development of corporate governance is a global occurrence, and as such is a complex area including as it does legal, cultural, ownership, and other structural differences. Evolution of the economy, corporate structure, or ownership groups may all affect how corporate governance will develop and be accommodated within its own country setting. Theories associated with the development of corporate governance. Identifies the agency relationship where one party, the principal, delegates work to another party, the agent. Board of directors is an essential monitoring device to try to ensure that any problems brought about from this relationship are minimized. Any cost used to prevent issues and monitor are called agency costs . Smith: directors of such companies however being the managers rather of other people"s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance .